The differentiation of uncommitted mesenchymal cells into osteoblasts is a fundamental molecular event governing both skeletal development and bone repair. Bone morphogenetic proteins (BMPs) are important regulators of this process and function by binding to cell surface receptors and translocating signals by means of Smad proteins. The interferon-inducible p204 protein, which has been shown to inhibit cell proliferation and trigger myogenesis, appears to be an important positive mediator of osteoblast differentiation, as illustrated by our recent findings that (1) p204 is highly expressed in native osteoblasts and is induced in the course of BMP-2-triggered osteoblast differentiation; (2) overexpression of p204 before differentiation significantly accelerates BMP-2-induced osteoblastic differentiation; and (3) p204 physically associates with core binding factor-alpha 1 (Cbfa1) and augments Cbfa1-dependent reporter gene activity. The central hypothesis of this proposal is that p204 acts as a regulator that is directly involved in the differentiation of mesenchymal stem cells into osteoblasts. The study will attempt (1) to define the role of p204 and interferon in the regulation of osteoblastic differentiation; and (2) to elucidate the molecular events underlying osteogenesis regulation by p204. Results from the proposed study will provide new information concerning regulation of osteogenesis, lead to further understanding of the role of interferon in skeletal growth and repair, and provide a biological basis for designing therapeutic approaches for a wide range of musculoskeletal disorders, including osteoporosis and osteopetrosis. Relevance to public health: Skeletal disorders present a significant public health risk, two well known conditions being bone fractures and osteoporosis. A greater understanding of the process of how bone is generated can lead to new therapies which can help stem or reverse the course of these diseases. [unreadable] [unreadable] [unreadable]